Question 1:

Prof. Arnold Schilder, Chairman International Auditing and Assurance Standards Board, states the following: "The use of data analytics in an audit of financial statements will not replace the need for the auditor to exercise appropriate professional judgment and professional skepticism. Furthermore, the world continues to change at an ever-increasing rate, with complexity becoming more prominent, particularly in relation to technology. Thus there is some urgency to deal with changes that are needed to keep the standards relevant and fit-for-purpose." Required: Artificial intelligence (AI), robotic process automation, business analytics, and blockchain are changing the way businesses are conducted, which have a significant impact on the financial audit. Discuss the effect of these advances in technologies on audit fees, audit competition, professional code of ethics, expectations gap, auditor's report, and the challenges faced by the audit profession, in the light of Schilder's comments [100 marks]

Learning resources

Earley, C. (2015). Data analytics in auditing: Opportunities and challenges. Business Horizons, 58(5), 493-500.

Rose, A. M., Rose, J. M., Sanderson, K. A., & Thibodeau, J. C. (2017). When should audit firms introduce analyses of Big Data into the audit process? Journal of Information Systems, 31(3), 81-99.